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Credit organisations prohibited from collecting lending fees, says State Bank
Credit organisations are prohibited not to charge borrowers extra lending fees, according to a new document signed by the Governor of the State Bank of Vietnam on June 10.
The Governor of the central bank has also assigned its offices in provinces and cities to supervise and inspect the implementation of the decision by commercial banks to make sure they comply with the new requirements and make immediate reports to the central banks cases of violations.
From May 19, the State Bank of Vietnam set the prime interest rate for Vietnamese dong at 12% a year.
The prime rate set by the central bank is the basic rate for commercial banks to set up their own trading interest rates, including both deposit and lending rates on the condition that lending rates cannot exceed 1.5 times the prime rate according to legal regulations.
In order not to violate the 18% lending cap, many commercial banks have started to charge borrowers various additional fees, thus increasing the real lending rates to above 18% a year.
The State Bank's new decision is aimed to stop this situation, ensuring the harmony of interest between both the borrowers and lenders.
Also on June 10, the State Bank of Vietnam announced a new prime interest rate for the Vietnam dong, to be effective from today, at 14% a year, up 2% a year compared to the current rate.
Accordingly, both the refinancing rate and the discount rate also increased by 2% a year each, to 15% and 13% a year respectively.
That means commercial banks now are allowed to charge lending interest rates to a maximum of 21% per year.
This is the first adjustment of the prime interest rate by the State Bank of Vietnam after nearly a month of implementing the new interest rate regulating mechanism.
On June 10, the State Bank of Vietnam also decided to adjust the inter-bank average exchange rate between VND and US dollar from VND 16,139 a US dollar for June 10 to VND 16,461 a US dollar on June 11.
The allowed trading band on the inter-bank foreign currency market is still maintained at ±1%. This means that credit organisations which are allowed to carry out foreign exchange activities can list their exchange rate at VND 16,296-VND 16,626 a US dollar.
The State Bank of Vietnam has also pledged to continue intervention to ensure the market's payments.
ND
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